SPEAKING
FREELY Turning back to
Napoleon By Emanuele Scimia
Speaking Freely is an Asia Times
Online feature that allows guest writers to have
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Sentiment in Japan
for further decentralization of administrative and
budgetary power from the central government to
local administrations is running high; in Europe
it is the other way around. In the Old Continent,
the economic crisis is silencing the centrifugal
forces that have been challenging state centralism
tendencies over the past two decades.
This
turnaround in the ever-growing empowerment of
peripheral authorities from the political center
is basically concerning debt-ridden countries like
Spain and Italy, but it is a situation that
Germany - the engine of
Europe - is also facing.
The combined debt
of Spanish regional administrations has reached
US$178 billion and accounts for 13% of country's
gross domestic product (GDP). Catalonia autonomous
region, a sort of Spain's equivalent to China's
Guangdong province in terms of domestic industrial
importance, has accumulated debts of $51.6
billion, the Spanish central bank has reported.
The crisis in Spain is at least playing
into the hands of the central government as to
defuse autonomist or separatist claims from some
regions, notably the old-age demands from the
Basque region for full independence and from
Catalonia for a more enhanced autonomy. The
Catalan regional government is set to apply for a
new $22 billion public rescue fund, which the
government in Madrid has set-up to help its
cash-strapped regions. In spite of debts that are
worth $8.2 billion, the Basque administration has
stated it does not need any form of bailout.
In Italy, regional administrations have
$49 billion of debts, according to the country's
central bank. Faced with both a high sovereign
debt and a current account deficit, the national
government led by Mario Monti has shelved the
long-standing issue of country's federalist
reform, as well as any debate about whether local
governments should raise taxes on their own.
Because of the crisis in Europe, the fever
of "neo-centralism" has also spread across
Germany. In late June, the federal government in
Berlin agreed to bail out its 16 indebted Lander
(regional governments), whose debts were worth
$765 billion, according to the federal statistical
office. In exchange for this financial help,
German states should give up some of their fiscal
power to the central government.
Centralization of power is also taking
hold within the European Union (EU) through the
completion of a European common budget, a more
integrated fiscal policy and a banking union. This
is the institutional framework under which Germany
and the other European northern states could agree
to the "mutualization" of debt loads contracted by
several EU countries.
It is worth noting
that in 1787 the United States strengthened its
federalist power once it took charge of the
combined debt of its 13 original states. Thomas
Sargent and Christopher Sims (both winners of the
2011 Nobel Prize for economics) have just
suggested this kind of political way forward for
the EU financial crisis.
With this
backdrop, the Scottish government's plan to hold a
referendum on the full independence from the
United Kingdom in the fall of 2014 (Scotland was
an independent sovereign state up until the
political union with England in 1707) seems to go
against the mainstream in Europe - much as the
lingering rift between the Dutch-speaking Flemish
majority and the French-speaking Walloon minority
in Belgium, whose political infighting in the past
years has often led to parliamentarian deadlock
and renewed calls for independence from the
wealthier Flemish region.
The history of
both United States and Germany teaches that a
federal system works best when it is enforced from
the beginning. It could prove costly turning a
centralist state into a federalist one on the fly,
as it may result in a multiplication of cost
centers rather than in a more rational and
effective handling of public spending.
The
Japanese Finance Ministry forecast in December
2011 that the overall debt of the country's local
governments would be worth $2.9 trillion at the
end of March 2013. With this perspective, rather
than focusing on devolution of power and authority
to peripheral administrations, Tokyo should in
reality struggle to keep public accounts of its
prefectures and municipalities in check.
China has the same problem. In its July
report on the country, the International Monetary
Fund (IMF) remarked that liabilities piled up by
Chinese local governments represented a key
domestic risk for Beijing's growth, along with a
decline in real estate investments. Local
administrations in China had $1.7 trillion of
debts by late 2010, according to Chinese official
data.
To repair the damage created by
their profligate local governments, European
countries (and the same EU) are turning back to
Napoleon Bonaparte and the old-fashioned model of
a centralist state.
The champion of the
decentralization of power in Japan, the mayor of
Osaka, Toru Hashimoto, who aims at transforming
the Osaka prefecture into a broad administrative
authority similar to the Tokyo metropolitan
government, should perhaps remember that Japanese
civil legislation has also drawn inspiration from
the Napoleonic code.
Emanuele
Scimia is a journalist and geopolitical
analyst based in Rome.
Speaking
Freely is an Asia Times Online feature that allows
guest writers to have their say. Please click here
if you are interested in contributing. Articles
submitted for this section allow our readers to
express their opinions and do not necessarily meet
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